1. Todays Lesson - Objectives  To be able to interpret a breakeven chart  To understand how to calculate a margin of safety.

2. Breakeven Lesson 2  How would you describe breakeven?

3. Key Words to remember  Revenue  Costs  Profit

5. Break-even video

6. Completing a breakeven chart

7. Step 1: Completing the axes Units sold Cost/Revenue (£000s) 020406080100120140160180200 0 20 40 60 100 120

8. Step 2: Adding the fixed cost line Number of hats sold Cost/Revenue (£000s) 020406080100120140160180200 0 20 40 60 100 120 Fixed Costs

9. Step 3: Adding the total cost line Number of hats sold Cost/Revenue (£000s) 020406080100120140160180200 0 20 40 60 100 120 Total Costs Fixed Costs

10. Step 4: Adding the sales revenue line Number of hats sold Cost/Revenue (£000s) 020406080100120140160180200 0 20 40 60 100 120 Total Costs Fixed Costs Sales Revenue

11. Step 5: Labelling the features of the graph Number of hats sold Cost/Revenue (£000s) 020406080100120140160180200 0 20 40 60 100 120 Total Costs Fixed Costs Sales Revenue Break-Even Point Loss Profit

12. The Margin of Safety

14. Break Even Chart  Takes considerable time to work out the BEP using this method. 0 250500750100015001250 225,000 200,000 175,000 150,000 125,000 100,000 75,000 50,000 25,000 Fixed costs (FC) Total Revenue (TR) Total Costs (TC) Volume or Output (units) Cost, Revenue (£)

15. What’s the problem with drawing it?

16. ACTIVITY - Identify one Strength and Weakness of Break Even

17. Logon onto businessstudiesonline  Goto  Activities/GCSE Business/Edexcel/Unit 3/section3/breakeven drag and drop  Then complete the other activities

18. Plenary  Write up one thing you would need to revise.